TaxTMI 
TaxTMI 
2019 (10) TMI 17
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.... prejudice to above, the Ld. CIT(A) failed to decide and consider the alternate claim of deduction u/s 80P(2)(a)(iii) of the Income Tax Act as claimed by the appellant society. 2. The brief facts of the case are that the assessee is a cooperative society which is engaged in the business of poultry farming. During the course of scrutiny proceedings, the A.O. observed that the assessee had claimed deduction of Rs. 11,68,222/- u/s 80P(2)(a)(vi) of the Income Tax Act, 1961 (hereinafter called as 'the Act'). The A.O. on scrutiny, disallowed the claim of deduction u/s 80P(2)(a)(vi) of the Act. Aggrieved against this, the assessee appeared before the Ld. CIT(A), who after considering the submissions of the assessee confirmed the order of the A.O. by observing as under: 3. Aggrieved against this order, the assessee is before this Tribunal. Ld. Counsel for the assessee submitted a written synopsis which is reproduced as under: 4. The Ld. D.R. opposed these submissions and relied on the order of the Ld. CIT(A). 5. We have heard the rival submissions, perused the materials available on record and gone through the orders of the authorities below. The contention of the Ld.....
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....ies below. The contention of the Ld. Counsel for the assessee is that the A.O. ought to have allowed deduction. It is stated that assessee is a co-operative society engaged in the collective disposal of labour and also engaged in providing marketing of agricultural produce grown by its members. It is contended that the authorities below have not considered the submissions in right perspective. Ld. Counsel submitted that if the assessee was not eligible for one clause, it would certainly eligible for another clause of the same section. It is incumbent upon the assessing officer to provide deduction if it is available. 6. We have considered these submissions of the assessee. Facts on record suggest that the submissions of the assessee ought to have been considered by the authorities below. We therefore, set aside the impugned order of the Ld. CIT(A) and restore the issue to the file of the A.O. to decide after considering all the submissions of the assessee and verifying its claim. The grounds raised in the appeal are allowed for statistical purposes." 10. Taking a consistent view, the issue in this year is also restored to the file of the A.O. for taking decisio....
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.... labour while tapping the toddy, yet the fact remains that the tapping of the toddy, per se, has not generated any income to these societies. Thus these assessee societies have not generated income from the activity of tapping of toddy, which might involve collective disposal of labour. In fact, these societies have generated income only through sale of toddy. Therefore, the income of the society has nothing to do with the collective disposal of the labour of its members, but is entirely from out of the price realized by it for the sale of toddy through the society's own toddy shops." 8. The appellant has not been able to give any argument in his submissions to counter the findings given by the A.O. The case laws given by the appellant are distinguishable from the facts in the present appeal. The case laws quoted by the A.O are clearly applicable in the case of the appellant. In the case of the appellant also the collective disposal of the labour of its members has not been utilized to earn the income of the society. The members of the society are rearing birds. The society has not earned income through the rearing of birds by the member....
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....ety from claiming deduction under section 80P(2)(a)(vi) of the Income tax Act, 1961 for the assessment year2013-14. of For the assessment year 2014-15. The said figure is Rs. 15,63,594/- on same lines. Ground no.2 for A.Y 13-14 and A.Y 14-15 The Id CIT(A) failed to decide and consider the alternate claim of deduction u/s 80P(2)(a)(iii) of The Income Tax Act as claimed by the appellant towards "marketing of agricultural produce" by relying on decision of Hon'ble AP High Court in the case of Mulkanoor Co-op Rural Bank Ltd. in both the respective assessment years. and A4 14-15 Additional ground for A.Y 13-14 (filed on 2/5/18) Claim of deduction u/s 80(P)(2)(a)(i) (as an alternative claim) The relevant pages of the orders of AO and CIT(A) as well as the compilation are tabulated for ready reference as below: AO(pgs) CIT(A)(pgs) Compilation Remarks/Brief submissions 1-3 2-7 1,2-31 (particular reference to pgs 6-7, 13-14 and 27) Pages 63,69,83,86 • Case of registered cooperative society. Duly Audited Accounts Disallowed to claim deduction u/s 80P(2)(a)(vi). Alternative claims u/s 80P(2)(a)(iii....
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....s of this section, the sums specified in sub section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely:- (a) in the case of a co-operative society engaged in- (i) carrying on the business of banking or providing credit facilities to its members, or (ii) a cottage industry, or (iii) the marketing of agricultural produce grown by its members, or (iv) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or (v) the processing, without the aid of power, of the agricultural produce of its members, or (vi) the collective disposal of the labour of its members, or (vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities : 3. Applicability of Section 80P Section 80P deduction i....
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....asy understanding of various provisions of the section, the provisions are being discussed in the order it appears in the section 6. Reading of the above provision shows that in the case of a co-operative society, if the gross total income includes any income generated out of the collective disposal of the labour of its members, such income shall be deducted in accordance with and subject to the condition in the proviso to the section in computing the total income of the society. 7. Assessee is a cooperative society is eligible to claim deduction u/s 80P(2)(a)(vi) of the income tax Act 1961, "Where, in case of an assessee being a cooperative society, the gross total income includes any income of a cooperative society engaged in the collective disposal of the labour of its members, there shall be deducted the whole of the amounts of the profits and gains of the business attributable to such activity in computing the total income of the assessee. 8. The eligibility to earn exemption is where the whole amount of profits and gains of a business is attributable to the collective disposal of the labour of its members. The words are very cle....
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....alised. It is also clear that it is only when collective disposal of a disposable commodity over which the society has control is made, the benefit is earned by the society. Such disposal shall be of the labour of the members of the society. This position is also clear from the judgment of this Court in Uralungal labour Contract Cooperative society." a. The objective of the assessee cooperative society is to bring about empowerment of its members; especially from the weaker sections of the society through economic and social progress by means of self-support and mutual cooperative through poultry farming. (kindly Refer bye laws pg. 2-31 of PB) b. Whole amount of profits attributable to the marketing of the agricultural produce grown by the members of the society is deductible u/s 80(P)(2)(a)(ii). "Agricultural produce of its members".s.80P(2)(a)(i) The language adopted in section will admit of the interpretation that the society engaged in marketing of agricultural produce of its members as agricultural produce 'belonging to' its members which is not even necessarily raised by its members. - Assam cooperative Apex Marketing Society Lt....